SHOCK: ECONOMY SHRINKS

The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.

The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.

The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.

The surprise contraction could raise fears about the economy's ability to handle tax increases that took effect in January and looming spending cuts.

Most of it was blamed on companies holding back on doing anything while they waited to see what was going on with the Fiscal Cliff issue. Defense spending was lower after a huge surge in October (last month of the fiscal year) and that dropped off as well. Things are expected to rebound next month.

The details weren't as discouraging as the headline. The drop, a surprise, was driven by a sharp fall in government spending and by businesses putting fewer goods on warehouse shelves, as well as by a decline in exports. The mainstays of the domestic private economy—housing, consumer spending and business investment in equipment and software—were stronger.

Research firm Capital Economics called the report "the best-looking contraction in U.S. GDP you'll ever see." Forecasters didn't see the decline as a harbinger of recession. They predicted the U.S. will expand at around a 2% pace in the current quarter, though the mood could shift Friday when the government releases its monthly snapshot of the job market.

For now, the economy is riding largely on the backs of consumers. Consumer spending, adjusted for inflation, increased at a 2.2% rate in the fourth quarter, up from 1.6% in the third. That included a jump in spending on durable goods, which are big-ticket items such as cars and refrigerators.

One thing that is helping consumers: They are starting to see substantial income gains after years of stagnation. The GDP report showed after-tax income rose at a rate of 6.8%, adjusted for inflation, the fastest pace since the recession.

If only that were true... I'd take lower GDP every month if it was only due to reduced govt input!

"And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

"It is difficult to free fools from the chains they revere." - Voltaire

Nobel Peace Laureate Obama has broken the all time record for Military Weapons Sales all 4 years in Office.

Obvious much of this is laundered money through the Department of State with so-called USAID packages.

Washington has run up $300 Billion in Debt in the first 3 months of FY2013 could of been worse, as many cashed-in investments to avoid the tax increases in Dec 2012(reflected in Treasury's report on increase of tax collections for December/End of Tax Year).

Geithner has stopped making payments in the federal pension fund, that's more borrowed money that has to be repaid.

"All eyes are opened, or opening to the rights of man, let the annual return of this day(July 4th), forever refresh our recollections of these rights, and an undiminished devotion to them."Thomas JeffersonJune 1826

Most of it was blamed on companies holding back on doing anything while they waited to see what was going on with the Fiscal Cliff issue. Defense spending was lower after a huge surge in October (last month of the fiscal year) and that dropped off as well. Things are expected to rebound next month.

figure in an 8% inflation rate and that makes the negative growth rate over 8%.

^^^ Wins Thread ^^^

1776 > 1984

The FAILURE of the United States Government to operate and maintian an Honest Money System , which frees the ordinary man from the clutches of the money manipulators, is the single largest contributing factor to the World's current Economic Crisis.

If they double the money supply by counterfeiting, the dollar becomes worth half as much. You could recreate the same inflation by printing up twenty-six times the money we had at the baseline.

I sort of figure inflation is more like 8%. Here is how.

If you take the $5.00 as a base figure and double it you get $10.00. That is a 100% increase.

If you take the $10.00 as a base figure and double it you get $20.00. That is a 200% increase from the original $5.00.

If you take the $20.00 as a base figure and double it you get $40.00. That is a 300% increase.

If you take the $40.00 as a base figure and double it you get $80.00. That is a 400% increase.

And you still have a ways to go. All of that has happened in about the last 50 years.

So like I say, "I sort of figure inflation is more like 8%."

If you go to a bank website and use a calculator to see what the change is it comes out to over 500% and 10% a year. I figure what is a couple of percentage points like 2% a year; UNLESS IT'S A 2% THAT IS A FLAT-OUT LIE.

If there had been any truth to their 2%-a-year inflation the gasoline that was 17 to 25 cents would now be running at about 34 to 50 cents a gallon after fifty years.

Our Inflation rates (see table below) are calculated to two decimal places while the government only calculates inflation rates to one decimal place. Therefore, while being based on the government's index our data provides a "finer" view. January and February 2005 is a perfect example, according to the government statistics both months had an inflation rate of 3%. In January however, our data shows it as 2.97% and February shows as 3.01%. Therefore instead of the inflation rate being "flat" it is actually rising slightly. In another example we see August 2003 and September with the Government saying the rates were 2.2% and 2.3% respectively. This would lead us to believe that inflation rose .1% during that period. In actuality however, it rose from 2.16% to 2.32% or a .16% increase, substantially more than .1%!

The Inflation rate table below is updated monthly and provides the current US Inflation Rate plus Monthly Inflation Rate data back to January 2000. The Inflation rate is calculated using the Current Consumer Price Index (CPI-U) published monthly by the Bureau of Labor Statistics.

Their latest figures show a rate for December 2012 of 1.74% compared to a year before and indicate an average for the entire year of 2012 of 2.07 (averaging each monthly figure).

You may soon get to the point where a particular inflation number may not matter as much as what exactly is inflating. Remember these keys . Job growth is determined by business. The economy is driven by consumer spending . Now examining the facts, taxes will lower the bar for the people, regulation will lower the bar for business , health bill lowers the bar for all. Now you should arrive @ no growth, except Govt growth . The keys to inflation in America are what takes money away from consumer spending .Taxes , fees, fines , food , energy. If a guy uses three gallons of gas a day , five times a week @ $3, that is $2340 ayr , if he uses three gallons a day @ $4 five days a week , it is $3120 a year. The new fridge ( as an example ) is gone from the budget.

Then , you must consider , if inflation is 5 percent , or whatever,( taxes etc ) wages will not keep pace , We basically are living in a time, when an ordinary person will make around the same and be able to buy less.....

You may soon get to the point where a particular inflation number may not matter as much as what exactly is inflating. Remember these keys . Job growth is determined by business. The economy is driven by consumer spending . Now examining the facts, taxes will lower the bar for the people, regulation will lower the bar for business , health bill lowers the bar for all. Now you should arrive @ no growth, except Govt growth . The keys to inflation in America are what takes money away from consumer spending .Taxes , fees, fines , food , energy. If a guy uses three gallons of gas a day , five times a week @ $3, that is $2340 ayr , if he uses three gallons a day @$4 five days a week , it is $3120 a year. The new fridge ( as an example ) is gone from the budget.

wtf, I just went for a drive and saw the price of fuel up to $3.40 a gallon. Are you Indians in on this?

Except as to the rule of appointment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

Most of it was blamed on companies holding back on doing anything while they waited to see what was going on with the Fiscal Cliff issue. Defense spending was lower after a huge surge in October (last month of the fiscal year) and that dropped off as well. Things are expected to rebound next month.

Actually according to the Silver and Gold Payment Calculator gas looks a little higher low now (It's confusing). Back in the sixties the price held about 17 to 25 cents, if I remember right. Still pretty close to what real money's value is and has held up to over the years.

Actually according to the Silver and Gold Payment Calculator gas looks a little higher low now (It's confusing). Back in the sixties the price held about 17 to 25 cents, if I remember right. Still pretty close to what real money's value has held up to over the years.

Except as to the rule of appointment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.